Home sales in the U.S. probably climbed in January to the highest level since May 2010, adding to evidence the housing market is regaining its footing, economists said reports this week will show.
Combined purchases of new and existing houses rose to a 4.97 million annual rate from 4.92 million in December, according to the median forecast in a Bloomberg News survey. Claims for jobless benefits held near the lowest level since 2008, bolstering consumer confidence, other reports may show.
A strengthening job market, combined with record affordability driven by the drop in home prices and mortgage rates, will probably keep underpinning demand. Nonetheless, the Federal Reserve and Obama administration are striving to find ways to lend the industry additional assistance amid concern that mounting foreclosures will continue to hinder the recovery.
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PepsiCo announced plans on Thursday to cut about 8,700 jobs as part of an effort to save some $1.5 billion in costs.
PepsiCo said the new cost-cutting plan will occur in 30 countries through 2014. PepsiCo spokesman Jeff Dahncke said that less than 2,000 of the job cuts will occur in the U.S., where the company employs 100,000 workers.
PepsiCo’s (, Fortune 500) stock slipped 4% in morning trading.
PepsiCo, which is based in Purchase, NY, noted that the job cuts represent less than 3% of its 300,000-strong global work force. The company still has numerous job openings listed on its web site.
Even as it cuts costs, the company said it plans to boost its spending on advertising and marketing by $500 million to $600 million this year, "with particular focus on North America."
PepsiCo is also planning to hike its dividend by 4%, to $2.15 per share, payable in June 2012, and to repurchase at least $3 billion in shares this year.
The job cuts are happening even as Chief Executive Indra Nooyi said the company experienced 8% annual growth in earnings per share over the last five years, and returned about $30 billion to shareholders in the form of dividends and share repurchases.
The company’s plan to cull its work force follows a recent report from the U.S. Labor Department saying that the economy gained 243,000 jobs in January, knocking down the unemployment rate to 8.3%.
Nuts! Diamond Foods boots CEO
On Thursday, the Labor Department said that adjusted initial claims — the number of unemployed workers applying for government assistant — dipped to 358,000 in the week ended Feb. 4. That’s a decline of 15,000 from the prior week.
Still, it’s too early to tell whether the good employment news is a trend or a temporary blip.
Germany and France send two key government officials to fill positions at the European Central Bank today, setting off a struggle for the job of chief economist.
Joerg Asmussen and Benoit Coeure join the ECB
The European Union’s antitrust watchdog says it is probing whether U.S. companies Honeywell and DuPont are restricting competition in the market for new refrigerants for car air-conditioning systems.
The European Commission said Friday it has received complaints that the two companies entered into “development, licensing and production arrangements” that prevent rivals from also developing new refrigerants that fulfill updated environmental standards.
Commission says it is also investigating whether Honeywell International Inc. is abusing its dominant position in the production of the new refrigerant, known as 1234yf, and deceived authorities during the evaluation of 1234yf.
The opening of a probe does not mean that Honeywell and E.I. du Pont de Nemours & Co. actually broke EU law.
President Ollanta Humala declared a 60-day state of emergency Sunday in a northern region wracked by protests against a highlands gold mine, the country’s biggest investment, by peasants who fear for their water supply.
The emergency restricts civil liberties such as the right to assembly and allows arrests without warrants in four provinces of Cajamarca state that have been paralyzed for 11 days by increasingly violent protests against the $4.8-billion Conga gold-and-copper mining project. U.S.-based Newmont Mining Corp. is the project’s majority owner.
Dozens have been injured in clashes between police and protesters, some of whom have vandalized Conga property. The general strike also shuttered schools and snarled transportation as protesters mounted roadblocks.
Humala said in a brief televised address Sunday night that protest leaders had shown no interest “in reaching minimal agreements to permit a return of social peace” after a day of talks in Cajamarca with Cabinet chief Salmon Lerner and three other ministers.
Humala said the government “has exhausted all paths to establish dialogue as a point of departure to resolve the conflict democratically” and blamed “the intransigence of a sector of local and regional leaders.”
He said the emergency would take effect at midnight Sunday.
Lerner’s group was accompanied by Peru’s military and police chiefs and guarded by hundreds of heavily armed police.
Cajamarca state’s governor, Gregorio Santos, who has been leading the protests, called Humala’s announcement an unnecessary provocation. He said protest leaders had been planning to end the strike and had asked government officials for 12 hours to consult with protesters.
“I think what’s being sought is for this to end in a bloodbath,” Santos told The Associated Press by telephone. Police have already used tear gas and bullets against protesters.
“We will continue with our fight,” Santos added, without specifying how.
Local elected officials have led protests against Conga, an extension of the nearby Yanacocha mine, for more than a month.
They say they fear it will taint and diminish water supplies affecting thousands and have demanded a new study of the environmental impact of the mine, which was to begin production in 2015.
Peruvian government officials have expressed no intention of redoing Conga’s environmental impact study, which was approved by the Ministry of Mining in October 2010.
Those plans call for displacing four lakes more than two miles high and replacing them with reservoirs. Local residents say they fear that could affect an important acquifer on which thousands depend.
Several weeks ago, the Interior Ministry asked prosecutors to file criminal charges against Santos and four other local leaders who have led protests against Conga, a top ministry lawyer, Julio Talledo, told The Associated Press.
The charges include “hindering the functioning of public services” and carry prison terms of at least two years. It was not immediately clear whether prosecutors have acted on them.
The streets of the regional capital, Cajamarca, and the city of Celendin, a flashpoint of protests, were empty Sunday night after Humala’s announcement but people remained tense, local police told the AP by phone. Local reporters reported seeing busloads of soldiers and police with assault rifles arriving in recent days.
Cajamarca police duty officer Miguel Vigil said police commanders were meeting to plan their next steps.
“We can’t yet say what measures will follow,” he said.
Newmont announced last week that it was suspending work at Conga until order could be restored.
Its chief executive, Richard O’Brien, said in a statement then that if Newmont was unable to continue with Conga, “the scale and diversity of Newmont’s global portfolio” would allow the Denver-based company to “reprioritize and reallocate capital” to “alternatives in Nevada, Canada, Ghana, Indonesia and Suriname.”
Humala told Cajamarca residents during campaign swings before his June election that clean water was more important for him than gold. Many local inhabitants said they now feel betrayed by the president.
Peru’s economy depends heavily on mining, which accounts for 61 percent of its export income.
Humala, a former radical leftist who moved toward the center before being elected this year, agreed to a tax on windfall profits from the industry that the government says will yield about $1 billion a year to help fund social programs.
One protest leader, Milton Sanchez, told the AP on Sunday night that “this government that has put itself on the side of mining companies and distanced itself from its electoral promises.”
“We are not radical,” he added. “It’s just that the Conga project has not legitimacy in the eyes of the people.”
Stocks are opening slightly lower, a day after the market had its best day in two and a half years.
Another rise in applications for unemployment benefits last week set a negative tone on Wall Street. The increase is a sign of weakness in the labor market because people are still being laid off.
Minutes after the opening bell Thursday, the Dow Jones industrial average was down 29 points, or 0.2 percent, at 12,016.
The Dow had soared 490 the day before, its biggest gain since March 2009, after central banks around the world slashed borrowing costs to shore up the global financial system installment payday loans.
The S&P 500 was down 4, or 0.3 percent, at 1,243. The Nasdaq fell 7, or 0.3 percent, to 2,613.
Cyber Monday. Green Tuesday. Black Friday. Magenta Saturday.
Chances are you won’t find any of these holidays on your calendar. Yet retailers are coming up with names for just about every day of the week during the holiday shopping season.
During T-Mobile’s “Magenta Saturday,” the event named for the company’s pinkish-purple logo earlier this month offered shoppers the chance to buy cellphones and some tablets on a layaway plan. Mattel lured customers in with discounts of 60 percent off toys for girls and boys on “Pink Friday and “Blue Friday.” And outdoor retailer Gander Mountain is giving customers deals on camouflage and other gear every Thursday through December during “Camo Thursdays.”
“There are hundreds of promotions going on this time of year,” says Steve Uline, head of marketing for Gander. “We needed to do something a little bit different.”
It’s difficult to get Americans to spend money when many are struggling with job losses, underwater mortgages or dwindling retirement savings. But merchants are hoping some creative marketing will generate excitement among shoppers during the last two months of the year, a time when many of them make up to 40 percent of their annual revenue. And they know that a catchy name can make a huge difference.
“The more special you make it sound, the more you might be able to get people,” says Alan Adamson, a managing director at brand consulting firm Landor Associates. “It’s tricky to come up with something simple and sticky.”
Retailers have done it before.
“Black Friday,” the day after Thanksgiving, in the 1960s became known as the point merchants turn a profit or operate “in the black.” Later, retailers began marketing it as the start of the holiday shopping season with earlier store hours and deep discounts of up to 70 percent off.
It’s since become the busiest shopping day of the year. This past weekend, “Black Friday” sales were $11.4 billion, up 7 percent, or nearly $1 billion from the same day last year, according to a report by ShopperTrak, which gathers data from 25,000 outlets across the country. It was the largest amount ever spent on that day.
But “Black Friday” has been a blessing and a curse: In recent years, it’s become so popular that it’s become known for its big crowds, long lines, and even disorder and violence among some shoppers.
“Black Friday has become a victim of its own success,” says Adamson, the branding expert. “It has been successful to the point where it has created the opportunity that if you don’t want to deal with the madness, come out on Tuesday or some other day.”
“Cyber Monday” was coined in 2005 when a retail trade group noticed a spike in online sales on the Monday after Thanksgiving when people returned to their work computers and shopped. While more people now have Internet access at home, retailers still offer discounts and other online promotions for the day. Last year, it was the busiest online shopping day ever, with sales of more than $1 billion, according to research firm ComScore Inc online payday loans.
Marketers are hoping to strike gold again. Many are doing so by appealing to Americans who’ve become disenchanted with big business and commercialism.
Nonprofit Green America is launching “Green Tuesday” this week to encourage people to buy gifts with the environment and local communities in mind. The group is planning to push the event every Tuesday through December.
Green America, which says it aims to support society and the environment through economic programs, plans to showcase deals on its website, including jewelry made from recycled nuclear bomb equipment from online retailer Fromwartopeace.com and a self-watering system for plants by Dri Water.
“Mass culture encourages people to run out of their house, now at midnight, and go shopping,” says Todd Larsen, director of corporate responsibility for Green America, which vetted the businesses it’s highlighting on its website to ensure they meet certain environmental and ethical standards. “Why not wait another day or more and buy something that helps others?”
Last year, American Express named the Saturday after Thanksgiving “Small Business Saturday” to encourage Americans to shop at mom-and-pop shops. This year, it offered a $25 credit to cardholders who register on social media website Facebook and shop at participating stores.
The company says it launched a multibillion-dollar campaign to promote it the day. The campaign included TV ads and marketing materials for small businesses to display in stores.
The effort has worked. Small retailers that except Amex had a 28 percent increase in revenue during the daylong event last year, compared with a 9 percent rise for all retailers, according to card activity measured by American Express. The company did not disclose the dollar amount spent that day.
It’s not clear yet how small businesses fared during the event this past Saturday, but a company survey before “Small Business Saturday” showed that 89 million consumers had planned to “shop small” on the day.
“People get it; they are behind it 100 percent,” says Yabette Alfaro, owner of Swankity Swank, a San Francisco home furnishings and accessories shop that participates in “Small Business Saturday.” “Our customers don’t want to participate in Black Friday. Most of them think anyone making a stand is great.”
Lizbeth Turq, a 26-year old in Deerfield, Ill., this past weekend shopped at several local shops during “Small Business Saturday.” She ended up buying some gifts for the holidays, including one for her mother at a home decor store. Most of the items she found were 20 percent off, she says.
“It’s really not an issue of having a sale or not,” Turq says, “It’s an issue of supporting the community I live in and creating jobs, particularly in the economy we are in.”.
Whether people celebrate or criticize Occupy Wall Street, the movement has reinvigorated calls for local buying just in time for the manic holiday shopping season.
Buying local and American-made became a battle cry for some in the movement that blames big business greed for shuttering American operations and shipping those jobs overseas.
“Some people talk about buying local and not supporting large chain stores, but really I think we want to encourage people to think consciously about where they shop,” said Zach Chasnoff, 33, of south St. Louis.
Chasnoff has wielded a bullhorn at a few Occupy St. Louis rallies, though he said he couldn’t speak as a representative of a movement. He said he’d been waiting for an opportunity to ignite this particular discussion.
Chasnoff owns a house painting business that fluctuates from two to seven employees during his busy season. When the bottom fell out of the economy in 2008, he was virtually unemployed for about seven months and didn’t know if he’d keep his house, he said. Meanwhile, bank bailouts and news of continued executive bonuses infuriated him. He blames greed for companies’ transferring jobs overseas and cheap foreign goods for undercutting American-made items.
Many economists challenge that logic, saying that free trade ultimately benefits the U.S.
“It feels almost anti-patriotic to buy goods made elsewhere right now. You are perpetuating the loss of manufacturing jobs,” Chasnoff said, echoing long-standing protests by some against, for instance, buying foreign cars.
Buying local, on the other hand, puts consumers, not corporations, in control, he said.
Would it work?
Steve Farazzi, a professor of economics at Washington University, said that the wage disparity concerns at the root of the Occupy Wall Street movement wouldn’t be solved by shopping at boutiques and farmers markets.
“I’d have a hard time telling people that their holiday shopping patterns will have an important impact on income distribution,” Farazzi said.
If globalization has killed American jobs and driven down wages, then the tool to combat the trend would be higher wages in emerging markets such as China, not necessarily closing operations there. China’s extremely cheap labor is the problem for American workers, not the fact that Chinese workers have jobs formerly held by Americans, Farazzi explained.
Rising global wages would level the playing field for American workers, he said, and it would increase the demand for all goods if we have more people who can afford to buy. But Farazzi acknowledged that a push to boost wages for Chinese workers
Hundreds of police officers in riot gear raided the Occupy Wall Street encampment in New York City in the pre-dawn darkness Tuesday, evicted hundreds of demonstrators and demolished the tent city that was the epicenter of a movement protesting what participants call corporate greed and economic inequality.
The police action began around 1 a.m. and lasted several hours as officers with plastic shields and batons pushed the protesters from their base at Zuccotti Park. Police Commissioner Ray Kelly said around 200 people were arrested, including dozens who tried to resist the eviction by linking arms in a tight circle at the center of the park. A member of the City Council was among those arrested during the sweep.
Tents, sleeping bags and equipment were carted away, and by 4:30 a.m., the park was empty. It wasn’t clear what would happen next to the demonstration, though the new enforcement of rules banning tents, sleeping bags or tarps would effectively end an encampment that started in mid-September.
“At the end of the day, if this movement is only tied to Liberty Plaza, we are going to lose. We’re going to lose,” said Sandra Nurse, one of the organizers, referring to the park by the nickname the demonstrators have given it. “Right now the most important thing is coming together as a body and just reaffirm why we’re here in the first place.”
Hundreds of protesters marched through lower Manhattan as the workday began, chanting and looking for a new space to gather. A state court judge called an 11:30 a.m. hearing on the legality of the eviction, following an emergency appeal by the National Lawyers Guild, and issued a temporary restraining order barring the city from preventing protesters from re-entering the park.
As of midmorning, though, the park remained surrounded by police barricades and officers keeping everyone out. A few dozen demonstrators sat on the sidewalk just outside the police line, waiting. In the meantime, workers used power washers to blast the plaza clean.
The surprise action came two days short of the two-month anniversary of the encampment. Mayor Michael Bloomberg said he ordered the sweep because health and safety conditions and become “intolerable” in the crowded plaza.
“From the beginning, I have said that the city has two principal goals: guaranteeing public health and safety, and guaranteeing the protesters’ First Amendment rights,” he said. “But when those two goals clash, the health and safety of the public and our first responders must be the priority.”
He said that people would be allowed to return as soon as this morning, but that the city would begin enforcing the rules set up by the park’s private owners banning camping equipment.
That left demonstrators wondering what to do next. There was talk among some Tuesday of trying to occupy another park or plaza, but there are no immediate plans to do so, Nurse said.
The eviction began in the dead of night, as police officers arrived by the hundreds and set up powerful klieg lights to illuminate the block.
Officers handed out notices from Brookfield Office Properties, the park’s owner, and the city saying that the plaza had to be cleared because it had become unsanitary and hazardous. A commander announced over a bullhorn that everyone had to leave. Many did, carrying their belongings with them. Others tried to make a stand, even chaining themselves together with bicycle locks.
In contrast to the scene weeks ago in Oakland, where a similar eviction turned chaotic and violent, the police action was comparatively orderly. But it wasn’t entirely bloodless.
“The cops hit my legs with a baton,” said demonstrator Max Luisdaniel Santos, 31, an unemployed construction worker, pulling up his pants to show some swollen scars on his calf. “Then they shoved my face into the ground.”
He pulled open his cheek to show where his teeth had cut into the flesh as he hit the stone paving payday advance lenders.
“I was bleeding profusely. They shoved a lot of people’s faces into the ground,” Santos said as he stood near the park Tuesday morning, looking shaken. He said he lost his shoes in the scuffle, but wasn’t arrested.
One person was taken to a hospital for evaluation because of breathing problems.
City Councilman Ydanis Rodriguez, who has been supportive of the Occupy movement, was among those arrested outside of the park. Kelly, the police commissioner, said he was trying to get through police lines to reach the protesters.
Protesters were able to grab about $2,500 in cash that was at the plaza before police kicked them out, said Pete Dutro, who is in charge of the New York City movement’s finances.
“We got all the dough,” Dutro said. “It’s on my person.”
Bloomberg said the evacuation was conducted in the middle of the night “to reduce the risk of confrontation in the park, and to minimize disruption to the surrounding neighborhood.”
“The law that created Zuccotti Park required that it be open for the public to enjoy for passive recreation 24 hours a day,” Bloomberg said. “Ever since the occupation began, that law has not been complied with, as the park has been taken over by protesters, making it unavailable to anyone else.”
He said the city would contest the motion filed by the National Lawyers Guild, a civil rights organization that has been representing arrested protesters.
Concerns about health and safety issues at Occupy Wall Street camps around the country have intensified, and protesters in several cities have been ordered to take down their shelters, adhere to curfews and relocate so that parks can be cleaned.
The surprise ouster at Zuccotti Park came as the movement was at its most vulnerable. A rift had been growing in recent weeks between the park’s full-time residents and the movement’s power players, most of whom no longer lived in the park.
The protesters who actually made things happen _ the ones who planned marches and rallies and set plans into motion _ held meetings in donated office space high above the park, in skyscrapers just like the ones housing the bankers they were protesting.
Some residents of Zuccotti Park have been grumbling about the recent formation of a “spokescouncil,” an upper echelon of organizers who held meetings at a high school near police headquarters. Some protesters felt that the selection of any leaders whatsoever wasn’t true to Occupy Wall Street’s original anti-government spirit: That no single person is more important or more powerful than another person.
But other protesters felt that Occupy Wall Street needed to be bigger than Zuccotti Park _ that they had, in a sense, outgrown it.
Occupy encampments have come under fire around the country and even overseas as local officials and residents have complained about possible health hazards and ongoing inhabitation of parks and other public spaces.
Anti-Wall Street activists intend to converge at the University of California, Berkeley, on Tuesday for a day of protests and another attempt to set up an Occupy Cal camp, less than a week after police arrested dozens of protesters who tried to pitch tents on campus.
The Berkeley protesters will be joined by Occupy Oakland activists who said they would march to the UC campus in the afternoon. Police cleared the tent city in front of Oakland City Hall before dawn Monday and arrested more than 50 people amid complaints about safety, sanitation and drug use.
In London, authorities said they were resuming legal action to evict a protest camp outside St. Paul’s Cathedral after talks with the demonstrators stalled.
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